USGC: Ethanol co-product ready for global demand

Jul 23, 2009

“I don’t think there is any question. You have to have a strong export market,” said Jim Hansen of U.S. Grains Council member POET to producers, agribusiness representatives and other agriculturalists at the Council's 49th Annual Board of Delegates Meeting in San Diego, Calif.

Steve Markham, CHS Inc.; John Hany, Land O’Lakes Inc.; Jim Hansen, POET; Greg Hibner, Tate & Lyle Ingredients Americas Inc.; and Randy Ives, Hawkeye Gold LLC, revealed their perspectives on the potential for dried grains with solubles (DDGS)in the global marketplace. The rapid escalation in the availability of DDGS, a co-product of U.S. ethanol production, and the growing need to expand the market for DDGS, while continuing to meet domestic demand was the resounding theme of the discussion.

With success in the growth of DDGS markets in Mexico, the largest buyer of DDGS, and Canada, which is the second-largest buyer of DDGS, Markham is looking into the future of DDGS sales.

“The next markets to develop are Asia and North Africa. We’ve really just grazed the surface there. The potential market in China is huge, and with the help of the Council, we are working to get DDGS registered and into the marketplace there,” he said.

Ives said the success already accomplished needs to be noted.

“The ability to expand our product reach has taken a lot of work by many entities, including the Council. To go from exporting 1.5 million metric tons to nearly 5 million tons of DDGS in a matter of five years is incredible,” said Ives.

"We have to realize the maximum value of the co-products, said Hany. “Simply put, exports are absolutely necessary in order to maintain the U.S. market as production continues to increase."